Written by 10:12 AM Economic news Views: 504

November GDP falls short of expectations, marking largest decline since December 2023

Canada’s real GDP fell 0.2% in November, the largest monthly decline since December 2023, according to Statistics Canada.

Canada GDP decline

This slight miss followed a 0.3% increase in October, with 13 of 20 sectors experiencing declines in November. Goods-producing industries dropped 0.6%, while services-producing industries fell 0.1%, ending five consecutive months of growth.

Sectors that saw the largest pull backs were mining, quarrying and oil & gas extraction (-1.6%), support activities for mining and oil & gas extraction (-4.6%), utilities (-3.6%) and transportation and warehousing (-1.3%). 

StatCan notes that the postal service sub-sector fell 20.3% in November, during which time approximately 55,000 postal workers went on strike starting November 15.

Real estate and rental leasing increased 0.3% in November, marking the seventh increase in a row. The construction sector also saw an uptick of 0.7%. Residential building construction rose 1.8% for the fourth consecutive month.

December GDP projected to rise, with February 1 tariffs in focus

After November’s GDP decline, December is poised for a rebound.

“Statistics Canada’s early estimate for December GDP is +0.2%, with retail activity providing a big helping hand due to the tax holiday,” writes BMO’s Benjamin Reitzes, adding, “However, there was weakness in housing, transportation/warehousing and wholesale.”

Marc Ercolao, an economist at TD Economics, points out that the economy is “tracking on point” with the Bank of Canada‘s recent projection of 1.8% annual growth for Q4. StatCan’s advance information estimate will be updated on February 28 when the official GDP release for December 2024’s GDP is released.

Despite November’s weakness, GDP has currently taken a backseat to the immediate threat of U.S. tariffs, according to economists.

“This is all old news…as everyone is on Tariff Watch at the moment,” writes Reitzes. “That’s all that matters near-term, whether we like it or not.”

As for the impact on future monetary policy, Ercolao believes the Bank of Canada “has its work cut out for them” for future decisions.

“After slashing interest rates this week, they will now wait for further details about Trump’s tariff implementation plan, which will come as early as tomorrow,” he wrote. “While we think the Bank will step to the sidelines at their March meeting, expedited rate cuts may be in the cards should a worst-case trade war ensue.”

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Last modified: January 31, 2025

Brett Surbey is a corporate paralegal and freelance writer based out of northern Alberta. His verticals focus on personal and business topics such as finance, corporate law, personal finance, and business development. His work has appeared in Forbes Advisor Canada, Publishers Weekly, Industry West Magazine, and various academic journals. He lives with his wife and their two children.

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